A unified framework for the pareto law and Matthew effect using scale-free networks

Abstract.

We investigate the accumulated wealth distribution by
adopting evolutionary games taking place on scale-free networks.
The system self-organizes to a critical Pareto distribution (1897)
of wealth P(m)∼m-(v+1) with 1.6 < v <2.0 (which is in
agreement with that of U.S. or Japan).
Particularly, the agent's personal wealth is
proportional to its number of contacts (connectivity), and this
leads to the phenomenon that the rich gets richer and the poor
gets relatively poorer, which is consistent with the Matthew
Effect present in society, economy, science and so on. Though our
model is simple, it provides a good representation of cooperation
and profit accumulation behavior in economy, and it combines the
network theory with econophysics.